More on Late-Life Divorce

En español | Couples divorcing after age 50 can face unique financial challenges related to everything from estate planning to Social Security benefits for ex-spouses. The more assets and debts accumulated over a long marriage, the more complicated the legal breakup. To help guide 50-plus couples through this financial maze, here are five more tips on late-life divorce from Janice Green, a family attorney and author of Divorce After 50: Your Guide to the Unique Legal & Financial Challenges.

1. How do you prepare for postdivorce living expenses?
The starting point is an accurate list of necessary and discretionary living expenses. You must know how much income you'll need — whether alimony, passive income from assets, note payments between spouses or employment. With less time to bounce back from the economic upheaval associated with divorce, accurate budgetary projections are crucial in the gray divorce.

I urge clients to work on this task over several days after all the financial records needed are available to them. They are also encouraged to work with a financial professional or financially savvy friend or family member who can challenge their assumptions and categories of expenditures. Doing so is cost effective and produces a more precise outcome.

2. Is estate planning relevant in a late-life divorce?
Yes, definitely. Think about estate planning at three points in time: before, during and after a divorce.

Before, you may have insurance beneficiaries, will beneficiaries or powers of attorney that benefit the other spouse or that name the other spouse to a fiduciary role such as an executor. Before filing for divorce, you may want to make changes. Sometimes changes are prohibited after a divorce is filed, so check with your attorney. You may not want your soon-to-be-ex-spouse to have powers under a health care or general power of attorney — especially not when there is a lot of conflict and life/death decisions are at stake.

During a divorce, estate plans can be a relevant part of a property settlement agreement. Sometimes, longtime spouses agree to create trusts for each other or have will provisions that benefit the other spouse — even after the divorce. For example, the couple may agree to set aside funds in a trust to pay for a spouse to go back to school to retool for the workplace. If the spouse decides not to go back to school for some reason, then that money is not lost. It can revert back to the first spouse or be used for other purposes. Also, it is important for the divorce attorney to review estate-planning documents created before the divorce, because you may have taken action that limits what you can do with certain property during a divorce.

After a divorce, you want to re-execute wills, etc. In most states, former spouses are automatically excluded from serving as trustees or estate administrators or from receiving under your will. So you want your wills and any living trusts to be in compliance with what you agree to in your divorce. I tell clients that they should not consider their divorce finished until they've revised their will and estate plan.